Investing.com - Oil prices slumped nearly 3% on Friday as U.S. President Donald Trump's as U.S. President Donald Trump’s decision withdraw from the 2015 Paris Agreement to fight climate change prompted speculation of a further acceleration in U.S. drilling, sparking further worries over the global supply glut.
The U.S. West Texas Intermediate crude July contract sank $1.37, or around 2.8%, to $46.99 a barrel by 5:48AM ET (9:48GMT).
Elsewhere, Brent oil for August delivery on the ICE Futures Exchange in London slumped $1.47, or 2.9%, to $49.16 a barrel.
The London barrel lost the $50 per barrel level, while U.S. crude broke below $48 and struggled to hold the $47 level as worries that Trump's decision to abandon the global climate pact could spark even more crude drilling in the United States.
While waiting for the latest update later on Friday, data from Baker Hughes already showed last week that U.S. drillers had added rigs for the 19th week in a row, the second-longest such streak on record, implying that further gains in domestic production are ahead.
The U.S. rig count rose by 2 to 722, extending an 11-month drilling recovery to the highest level since April 2015.
The steady increase caused concern that it would thwart efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producing countries to control the global supply glut.
At last week's meeting in Vienna, OPEC and some non-OPEC producers, led by Russia, agreed to extend supply cuts of 1.8 million barrels per day until the end of the first quarter of 2018.
While OPEC's move had been widely expected, some oil market investors had hoped producers would agree to longer or deeper cuts to drain a global glut of crude supplies.
So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord.
In fact, a Reuters survey released Wednesday showed that OPEC oil output rose in May, the first monthly increase this year as higher supply from two OPEC states exempt from a production-cutting deal, Nigeria and Libya, offset improved compliance with the accord by others.
The cartel will not hold another official meeting until next November, dampening chances for its members to reach a deeper agreement to hamper the effect on global supply of increased U.S. production.
Elsewhere on Nymex, gasoline futures for July traded down 2.02% at $1.5583 a gallon, while July heating oil tumbled 2.245 to $1.4679 a gallon.
Natural gas futures for July delivery gained 0.273 to $3.015 per million British thermal units.